Rents are soaring and homes sell for millions over asking. So why can’t developers make the numbers work?
San Francisco needs more housing. Almost everyone agrees on that. But before a single shovel hits the ground, a project has to “pencil out,” and right now, almost nothing does.
On this episode of “PST,” The Standard contributing editor Thomas Goetz explains the brutal math behind the city’s development drought. Labor in the Bay Area costs about 50% more than the national average. Construction loans that ran at about 4% interest five years ago are now as high as 10%. And a report commissioned by the city’s chief economist found that none of the rental projects it modeled would pencil out, even if the land were free…